A long time ago, in a galaxy far, far away, real billionaire Jeff Gundlach suggested faux billionaire Donald Trump may not run for a second term as president.
During a Fox interview on June 19 of last year, Gundlach surprised the network with his assessment of what might happen in the event the US economy careened into a downturn ahead of the vote.
“I’m not even sure heâ€™s going to really run”, Gundlach remarked. “If the economy goes into recession and he canâ€™t pull out by removing the tariffs, thereâ€™s very little for him to run on”.
Gundlach was not impressed when Fox reminded him that Trump kicked off his reelection bid in Orlando the day before. “Things can change”, he said.
Fast forward a year and things have, in fact, changed. The US economy is in a recession, and the second quarter is poised to show the most dramatic contraction in the history of modern economic statistics.
Most of this isn’t Trump’s fault in the first instance. He didn’t create the novel coronavirus. But the administration’s response to the epidemic is generally seen as wholly inadequate and the concurrent groundswell of societal unrest tied to racial and economic inequality is exacerbating the situation.
The president is doubling down on abrasive rhetoric aimed at stoking culture clashes, both at home and abroad. That is not a partisan assessment. It is simply the inescapable conclusion one comes to from reading Trump’s Twitter feed, which is a repository of contentiousness.
From a normative perspective, it’s easy to lament the deleterious effect Trump’s rhetoric has on American democracy. From a political strategy standpoint, though, it’s hard to blame him for suspecting that polls which have him trailing Joe Biden by a wide margin simply don’t reflect reality. After all, the pollsters were decisively wrong in 2016. He relied on the exact same divisive rhetoric then, and it propelled him into the Oval Office.
The chart in the left pane (below) is from a Goldman note dated August 2019. It’s quite something. The right pane shows the U-turn in equity futures on election night.
“Comparing prediction market-implied odds from 2016 with earlier polling results, Trumpâ€™s election was the biggest presidential election surprise in at least the past 40 years”, Goldman wrote, adding that “the 1976 election is the only other instance of an electoral surprise at all, but even then President Ford was favored only very narrowly to defeat Governor Jimmy Carter”.
So, it’s entirely possible that all of the polls showing Trump trailing are wrong again, and that a strategy which revolves around dividing the nation and stoking tensions of all sorts will win out in the end.
But, it feels increasingly like the electorate is weary of the daily soap opera — that the incessant barrage of tacky, bumpersticker jingoism has worn out its welcome with all but the most ardent fans.
While Trump isn’t likely to formally pull out of the race, Gundlach’s prediction could end up being de facto accurate to the extent the president has quietly come to terms with the idea he won’t be reelected. Consider the following, from a Politico piece published late last month:
Donald Trump knows he’s losing.
The president has privately come to that grim realization in recent days, multiple people close to him told POLITICO, amid a mountain of bad polling and warnings from some of his staunchest allies that he’s on course to be a one-term president.
Trump has endured what aides describe as the worst stretch of his presidency, marred by widespread criticism over his response to the coronavirus pandemic and nationwide racial unrest. His rally in Oklahoma last weekend, his first since March, turned out to be an embarrassment when he failed to fill the arena.
What should have been an easy interview with Fox News host Sean Hannity horrified advisers when Trump offered a rambling, non-responsive answer to a simple question about his goals for a second term. In the same appearance, the normally self-assured president offered a tacit acknowledgment that he might lose when he said that Joe Biden is â€œgonna be your president because some people don’t love me, maybe.”
Some commentators (and a few readers) recently wondered if the president’s behavior is indicative of a man who knows defeat is all but inevitable and thus no longer feels duty-bound to act any semblance of rational. Maybe he’ll just try to “burn it all down”, goes one narrative.
That assumes Trump ever felt the need to act rationally in the first place, and I personally doubt that he’s completely thrown in the towel. Still, the interview referenced by Politico in the excerpted passages isn’t the only time the president has come across disengaged recently.
On Wednesday, The Cook Political Report was out with an updated Electoral College forecast which shows Biden holding a commanding advantage, and the accompanying commentary is dour indeed for the incumbent.
“This election is looking more like a Democratic tsunami than simply a Blue wave”, Amy Walter wrote, announcing the following changes:
- Wisconsin,Â Pennsylvania, andÂ Nebraskaâ€™s 2ndÂ district move from Toss Up to Lean Democrat.
- Maine, once in Lean Democrat, moves to the safer Likely Democratic category.
- GeorgiaÂ has joined Arizona, North Carolina and Florida in the Toss Up column, although, at this point, Biden would be slightly favored to win at least Arizona and Florida.
- Maineâ€™s 2ndÂ district has moved from Likely Republican to a more competitive Lean Republican.
“These moves alone push Biden over the 270 electoral vote threshold (to 279)”, she said, before noting that “Republican strategists weâ€™ve spoken with this week think Trump is close to the point of no return”.
“A couple of others wondered if Trump had reached his ‘Katrina’ moment: a permanent loss of trust and faith of the majority of voters”, she added.
Of course, this could all turn around by November. Or it could turn out that everyone is just wrong, and that Trump still commands the loyalty of a “silent majority”, just waiting to cast their ballots for a man who, if nothing else, can claim the presidency didn’t change who he is. He asserted as much Wednesday.
And yet, I keep coming back to Jeff Gundlach, as much as it pains me to say that.
Specifically, Gundlach’s quote about the economy seems eerily prescient a year later, with the obvious caveat that he didn’t predict a pandemic: “If the economy goes into recession and he canâ€™t pull it out, thereâ€™s very little for [Trump] to run on”.
On Wednesday, after an irritable tweet accusing the CDC of adopting unreasonable guidelines for reopening schools, Trump made his pitch.
“Economy and Jobs are growing MUCH faster than anyone (except me!) expected”, he said. “Shaping up for a good third quarter, and a great next year!”